Key Summary
- Economic Doubling: GDP to grow from US$547 billion to US$1.2–1.4 trillion
- Services-Led Economy: Accounting for 74% of the economy, with rapid growth in finance, digital, and healthcare
- AI & Talent: Productivity gains and continuous human capital upgrading are core drivers
- Major Infrastructure: Tuas Port and Changi T5 to bolster trade and aviation leadership
- Financial Strength: Stock market poised to hit 10,000 points; SGD may reach 1:1 parity with USD
- Aging Population: Accelerating the expansion of the care and healthcare industries
- Sustainable Development: Net-zero carbon targets driving the green energy transition
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Singapore 2040: The Next Fifteen Years of Quality and Inclusive Growth
Excerpt from the DBS Bank research report “Singapore 2040: The Next 15 Years of Quality and Inclusive Growth”
I. Macro Outlook
By 2040, Singapore will celebrate its 75th year of independence, its Platinum Jubilee. According to DBS Group Research forecasts, Singapore’s Gross Domestic Product (GDP) will grow from US$547 billion in 2024 to US$1.2 to 1.4 trillion, effectively doubling the size of its economy.
Over the next 15 years, the projected average annual real growth rate is 2.3%, higher than other developed economies (approx. 1.6%). The growth drivers will primarily be capital accumulation, human capital enhancement, and productivity improvements.
The services sector will continue to be the backbone of the economy, accounting for approximately 74% of nominal value-added, while manufacturing will comprise about 16%, and construction about 5%.
II. Key Growth Pillars
- Capital and Human Capital: These will be the core drivers of long-term growth, though the labor force will be slightly constrained by an aging population.
- Innovation and Reskilling: The government and businesses will jointly promote artificial intelligence and reskilling programs to boost labor productivity.
- New Economic Sectors: The digital, green, and care economies will lead the next phase of structural growth.
- Infrastructure Investment: Major projects such as Tuas Port, Changi Airport Terminal 5 (T5), and the urban decentralization development plan will continue to support growth.
III. Financial and Monetary Outlook
- Stock Market Breakthrough: The Straits Times Index (STI) is expected to break its 17-year high in 2025 and could climb to 10,000 points by 2040.
- Supporting Factors: Inflows of global capital, market liquidity reforms, and the Equity Market Development Programme (EQDP) launched by the Monetary Authority of Singapore (MAS).
- Currency Strength: The Singapore Dollar (SGD) is projected to potentially reach 1:1 parity with the US Dollar around 2040, benefiting from productivity growth, its safe-haven status, and a current account surplus.
IV. Future Key Industries
- Trade and Connectivity Hub: Leveraging Tuas Port and Changi T5 to strengthen its leadership in logistics and aviation.
- Financial Services: Assets under management have surpassed S$6 trillion, with a focus on developing wealth management, green finance, and digital assets.
- Energy and Climate: Aiming for net-zero emissions by 2050 and importing 6GW of low-carbon electricity before 2035.
- Real Estate: An estimated 200,000 to 300,000 new housing units are expected by 2040, with new opportunities arising from urban renewal and regional decentralization.
- Healthcare: By 2040, one in three Singaporeans will be aged 65 or older. Healthcare expenditure is set to reach S$30 billion by 2030, growing at an average of 5% annually. Elderly care, insurance, medtech, and telemedicine will become new growth areas.
V. Emerging High-Growth Industries (to 2030)
- Digital Infrastructure (Cloud Computing, AI)
- High-End Manufacturing and Semiconductors
- Cybersecurity
- Biotechnology
- Green Energy, Autonomous Driving, and Digital Health
VI. Risks and Long-Term Vision
Key challenges include: rising global protectionism, geopolitical volatility, high real estate valuations, population aging, and climate risks.
The strategic core for Singapore’s future is resilience, inclusivity, and sustainable development.
By 2040, Singapore is poised to become a US$1.4 trillion innovative economy, continuing to maintain its status as a global financial hub,
and advance towards a high-quality and sustainable future with the spirit of “Doing Well by Doing Good.”
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